California Assembly Backs Rules for Private Equity Health Deals

Private equity firms would face new rules when running health-care companies in California under a bill the state Assembly passed Friday.

The bill (SB 351) would prohibit private equity firms or hedge funds from making certain decisions for physician or dental practices that backers of the measure argue should be the responsibility of trained medical professionals.

A private equity firm couldn’t determine what tests or procedures are appropriate for patients or decide which equipment and supplies to use, under the legislation.

The Assembly passed the bill by a 61-0 vote, and it goes to the state Senate, which ...